Tag: plan year

Question: Is the new FSA maximum of $2,500 based on the calendar year or the plan year if it falls outside of January to December? Answer: This is based on the plan year, not the calendar year.  The IRS issued additional guidance (http://www.irs.gov/pub/irs-drop/n-12-40.pdf) that clarifies this issue as follows:  “Because employees make salary reduction contribution…

Question: Can an employee stop his/her FSA contributions for dependent care in mid-year? Answer: The employee’s selection is irrevocable for the plan year unless the employee experiences a change in status or other qualified event as defined in the IRS Regulations addressing mid-year election changes and your plan permits such qualified changes.   The first thing…